As businesses continue navigating the challenges that have resulted from the COVID-19 pandemic, many sales leaders are wondering the best path forward.
It’s a tough question and doesn’t have a single right answer.
One of the toughest changes sales leaders need to adapt to is the dramatic impact the events of 2020 have had on win rates. According to research conducted by Revenue Grid, before the pandemic only 57 percent of sales reps reported that they expected to fall short on their sales quotas at the end of 2019, with that figure ballooning to a whopping 84 percent by second quarter 2020.
A common phrase that has been used in relation to how businesses move forward is the "new normal". Before sales teams can adjust to the new normal, it helps to understand what the new normal is, and what it could look like.
Conventional wisdom dictates that the best way to grow a business is by attracting and converting as many new customers as possible. However, we’re finding B2B businesses are prioritizing their existing customers over attracting new ones.
In the fourth quarter of 2018, the average sales team reported that 37 percent of their sales opportunities were from new accounts and deals. In comparison, the fourth quarter of 2019 found that only 22 percent of sales opportunities came from new customers.
Research suggests even a five percent increase in customer retention can increase a company’s profitability by 75 percent. Additionally, it can cost companies five times more to acquire a new customer than it does to retain a current customer. Not only is it more cost-effective for B2B businesses to focus more on their existing customers, it also provides opportunity for acquiring new high-value customers through referral marketing.
With these data points in mind, making your current customers feel valued can be an effective way to impact your bottom line.
Consider ways you can continue to add value to your customer’s lives beyond your core offering. For example, your organization could consider implementing a loyalty program to incentivize and reward your current customers for their commitment to your brand.
Keep in mind that there is no one-size-fits-all solution for providing value. What one person might find valuable might be completely wrong for someone else, so continue experimenting to find the approach that resonates most for a majority of your customer base.
As a B2B organization, you know your clients are business owners themselves and appreciate rewards that will benefit their business in the long run. With this in mind, try to look beyond offering simple discounts and demonstrate that you understand your client’s needs and pain points by offering them something that benefits their business.
A great example of this is Mailchimp’s Partner Program, which offers Mailchimp customers unique rewards such as priority customer support, exclusive access to private webinars and masterclasses around business-building and email marketing, as well as networking opportunities with other members of the program. These incentives demonstrate the level of commitment Mailchimp has towards the success of their clients.
Additionally, participation in this program is by application only with Mailchimp selecting their strongest customers to join.
Not only is this a fantastic way for the company to deepen their relationship with their best customers, but Mailchimp also cleverly uses their program as a way to turn loyal customers into brand advocates. On top of all the benefits members of the partner program receives, Mailchimp also offers members the opportunity to run co-marketing campaigns such as joint webinars and masterclasses with the brand.
This strategy benefits the partner by giving them access to even more exclusive benefits and rewards, as well as benefiting Mailchimp by having customers promote their product to an engaged and interested audience.
2. Sales priorities are shifting.
If companies have learned anything from the financial crises of 2001 and 2008, it’s that adapting to meet the changing needs and priorities of your customers is key.
It’s only natural that the COVID-19 pandemic and subsequent economic impacts have led small business owners to be more cautious with how they invest their resources. But as a B2B service provider, it’s vital you truly understand the reasons and motivations behind your customer’s shifts in priorities and values.
Reflect on the answer to questions such as:
Is my customer cutting costs everywhere or just in a few places? If it’s only a few, why are they specifically cutting back in those areas?
How can I help them achieve their main business priority?
Has my ideal customer profile changed? How so?
With many businesses everywhere looking to cut costs, the key to winning and keeping customers is to show that you truly understand what their needs are.
According to research conducted by Revenue Grid, sales messages that emphasize the cost and growth benefits of their tools have a 15 percent higher open rate compared to messages that don’t. Additionally, messages that demonstrate the financial cost and outcome of a purchase have a 22 percent higher open rate.
More than just being able to influence and persuade a customer, an increasingly important skill for the modern salesperson is the ability to listen and empathize with their customer.
On top of being more risk-averse and informed than ever before, the modern customer also has vastly different expectations of the type of support and value they receive from a brand. Today’s customer expects salespeople, and by extension the brand they do business with, to provide value above and beyond their core product or service.
In fact, according to the 2017 State of Global Customer Service Report by Microsoft, 96 percent of customers say that customer service is important in their choice of loyalty to a brand. Furthermore, 77 percent of customers reported that they have a more positive view of brands that actively ask for and accept customer feedback.
As always, the best way to learn more about your customers is to simply have a conversation with them. A straightforward way to gain a better understanding of your customers is to conduct a Net Promoter Score (NPS) survey.
Originally developed by Bain and Company, NPS is a way for businesses to track and measure how they’re being perceived by their customers by asking the simple question such as: “On a scale of one to 10, how likely are you to recommend our brand to a friend or colleague?”
The responses to this question alone can give you a high-level view of how your business is doing in terms of customer loyalty. It’s important to note, you don’t have to limit yourself to one question on your customer experience survey. You can also ask open-ended questions such as "What is the reason behind your score?" and "What can we do to improve your experience?" The answers to these questions can give you a world of insight into how your business can better serve your customers.
In a time of increasing stress and anxiety, customers want to work with businesses people they can trust to have their best interests in mind.
3. Increasing pipeline velocity.
After a decline in pipeline growth across the board in March and April, we’re now beginning to see sales opportunities rise again. What this tells us is that SMBs and enterprises alike are looking for solutions to help them grow.
To acquire these opportunities, B2B businesses are restructuring their sales pipeline to move faster and improve their chances of closing a deal.
Since the decline in pipeline growth earlier this year, we’ve seen the majority of sales teams work towards removing inefficiencies from their sales pipeline such as introducing processes to better qualify potential customers, and developing better prospecting strategies to ensure that they’re focusing on decision-makers. This goes to show the increasing importance of being able to close a deal quickly with the right customers instead of filling the pipeline with as many leads and prospects as possible.
There are a variety of ways to improve your pipeline velocity, but the most straightforward tactics to ensure that you are properly qualifying your prospects. Too often sales teams will have situations where they’ll end up wasting valuable time and effort talking to someone who will never end up being a customer.
It helps to break down your customer journey and understand what specific actions and conversations you need to be having to move someone into the next stage of your sales funnel.
Typically the customer lifecycle can be broken down into the five main stages including discovery, education, purchase, post-purchase engagement, and advocacy. These stages take into account the key interactions between the customer and the business, allowing reps to prepare for the pain points unique to each stage.
Besides being a great way to visually understand the general flow of the customer lifecycle, by breaking down and critically examining each stage of the customer journey you’ll be able to start figuring out which specific areas you can be optimizing and improving on. For example, you might discover that prospects that attended a live product demo have a far higher conversion rate compared to those that didn’t.
On the surface, it could appear this information shows the importance of live product demos, but after digging deeper into the data you might also discover that your current sales process incorrectly identifies anyone who registers their interest in attending a product demo as a sales qualified lead (SQL) regardless of if they’ve actually attended the demo or not. This causes a knock-on effect where unqualified leads are pushed further down the sales funnel and end up frustrating leads and salespeople alike.
Armed with this information, you can start developing tactics and marketing messages specifically for prospects who have actually participated in product demos. You can also develop a process that removes unqualified prospects from your pipeline, saving your sales team from wasting their time and energy on these types of leads.
It’s a small improvement, but it’s precisely these types of changes that have a huge impact on the overall velocity of your sales pipeline and your bottom line. Though there is no official guidebook on how to handle business moving forward, focusing on the following areas is a great place to start:
Customer loyalty and retention.
True empathy and a willingness to listen to your customers.
An efficient sales pipeline.
Navigating this new world of sales is going to be challenging, but it isn’t impossible. Take our research and findings and use it to help your business navigate its way through this new sales landscape.
Originally published Jul 15, 2020 1:15:00 PM, updated July 16 2020